Is The Oil Bubble Ready To Burst?

Posted by Investing Freak on July 07, 2008
Market Analysis

Bubbles Always Have a Limit where they can no longer grow and sustain the hype.

I have seen oil run up like many of you have but without owning a car it hasn’t hurt my wallet yet.

I’ve been thinking of investing in an oil shorting stock (Exchange traded Fund in this case.)
Symbol: (DUG)   which bets that oil will go down. The ETF that bets for oil is (DIG) and the top 10 holdings are listed below.  DUG basically almost shorts all those companies and more.

Top 10 Holdings For Dig
Security Description Weight
EXXON MOBIL CORP COM STK 25.21%
CHEVRON CORP COM STK 10.87%
CONOCOPHILLIPS COM STK 6.96%
SCHLUMBERGER COM USD0.01 6.45%
OCCIDENTAL PETROLEUM CORP 3.81%
DEVON ENERGY CORP(NEW) 2.62%
TRANSOCEAN INC. (NEW) COM 2.40%
HALLIBURTON CO COM STK 2.36%
APACHE CORP COM STK 2.35%
MARATHON OIL CORP COM STK 1.9

Source: ProShares

—–

Here is my usual chart showing the trend reversal the past few days.

It broke through the 50 day moving average and might make a modest run.


—–
An interesting chart showing that the oil price has touched base with the total oil consumption just like the 1980’s bubble.
Source: SmartEconomy
—–
Disclaimer: I have not invested into DUG yet but it is getting very interesting.

Tags: , , , ,

Comments are closed.